Ratos enters Memorandum of Understanding to acquire Perlos Healthcare

Ratos enters into Memorandum of Understanding with Perlos to acquire 78% of Perlos' medical technology business unit Perlos Healthcare

Ratos' equity investment will amount to a maximum of approximately SEK 280 m

Perlos intends to hold on to a 20% stake in Perlos Healthcare

Perlos Healthcare, which reported net sales of EUR 53m in 2005 (EUR 44m in 2004), has some 500 employees in Finland and England

Through this investment, Ratos has made additional advances in the Finnish market

Ratos and Perlos have today signed a Memorandum of Understanding to establish a new holding company to the operations within Perlos' medical technology business unit Perlos Healthcare. The new company will be owned to approximately 78% by Ratos, 20% by Perlos and 2% by Perlos Healthcare's management. According to the Memorandum of Understanding, the cash and debt free purchase price (Enterprise Value) of Perlos Healthcare will be EUR 67m. The intention is to sign a definite sale and purchase agreement in the near future.

Perlos Healthcare develops and manufactures drug delivery and disease management devices, birth control systems and point-of-care diagnostics devices and supplies for a wide area of healthcare professionals. For personal care markets, it offers solutions in vision care, dental care, drug dispensing and packaging solutions. Perlos Healthcare offers its customers one-stop-shopping services from design and development of drug delivery and medical devices to contract manufacturing.

Perlos core business is in electromechanical module manufacturing for the telecommunications and electronics industries. In view to support the expanding scope of the Healthcare division's operations, Perlos has made a decision to find an investment partner for Perlos Healthcare.

"We are delighted to enter into this collaboration with Ratos, which has a strong tradition of ownership in many well-known Nordic companies," says Isto Hantila, CEO and President of Perlos. "This will give Perlos Healthcare the best possible conditions for further development and at the same time free resources for Perlos to continue investing in its core business."

Over the past few years Perlos Healthcare's sales have grown more than 10% annually. EBITDA for 2005 amounted to EUR 8m (EUR 3.7m). Perlos Healthcare's market share is estimated at just over 1.5% of a highly fragmented market. The new company will include Perlos Healthcare's production facilities in Kontiolahti, Finland, and Sunderland, England.

Perlos Healthcare's current management, headed by CEO Jouni Pohjonen, will remain in place and will invest in the company together with Ratos and Perlos.

"We see an exciting future potential for Perlos Healthcare," says Ratos' CEO Arne Karlsson. "The industry's strong growth and profitability, coupled with its fragmented structure, offer many interesting opportunities. We are also very pleased to have entered into the partnership forged today with Perlos."